A bank's ability to earn money affects its safety and soundness. A bank can retain its earnings, increasing its capital buffer, or put them to work addressing problematic loans, potentially making the bank more resilient in times of trouble. Losses, on the other hand, reduce a bank's ability to do those things.
On Bankrate's test of earnings, Cornerstone Bank, Inc. scored 12 out of a possible 30, failing to reach the national average of 15.12.
One key way to measure a bank's earnings is return on equity, calculated by dividing net income (profit, essentially) by the total amount of equity. Cornerstone Bank, Inc.'s most recent annualized quarterly return on equity was 5.81 percent, below the national average of 8.10 percent.
The bank recorded net income of $989,000 on total equity of $17.1 million for the twelve months ended December 31, 2017. The bank reported an annualized return on average assets, or ROA, of 0.60 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.